Cell-cell signaling plays a major role in shaping organisms during development. In addition, it has become evident that deregulation of the extracellular signaling pathways that direct growth and differentiation contribute to cancer. Following their production, extracellular factors are secreted and diffuse to reach their cognate receptors on target cells. The signal transduction pathways downstream of the receptors have been studied extensively. However, we know very little about the mechanisms regulating secretion, transport, and distribution of extracellular factors.Hedgehog is the ligand in an evolutionary conserved signal transduction pathway. We have identified and characterized a Drosophila melanogaster gene, tout velu, that is required for Hedgehog to reach its target cells. tout velu is a family member of the EXT1 and 2 tumor suppressors that are mutated in patients with the multiple exosostoses syndrome. The EXT proteins are glycosyltransferases for Heparan Sulfate Proteoglycans (HSPGs). These Proteoglycans are composed of a protein core to which glycosaminoglycan (GAG) chains are attached. They have been implicated in a number of cellular processes such as cell adhesion, motility, proliferation, differentiation, and morphogenesis. The identification of mutations disrupting core proteins and enzymes involved in HSPG biosynthesis that lead to developmental defects and disease has underscored the importance of HSPGs. Our goal is to improve our understanding of their role in Hedgehog distribution.Specific Aim 1 of this proposal focuses on the investigation of the role of HSPGs in Hedgehog distribution. Specific Aim 2 of this proposal outlines experiments to understand the interrelationship of Drosophila EXT1 and EXT2 in vivo. Specific Aim 3 describes a genetic screen to identify and characterize novel components required for Hedgehog distribution and signaling.